UK economy grew at half the rate of eurozone in second quarter: Report

In this posed photograph, newly issued 12-sided £1 (one pound) coins are pictured in a pile in London on March 28, 2017. (AFP photo)

Britain’s economy grew at half the rate of the eurozone’s during the second quarter of 2017, as a Brexit-fuelled spike in inflation lowered consumer spending, according to new official statistics.

The UK economy expanded by 0.3 percent in the three months to the end of June, figures from the Office for National Statistics showed on Thursday.

Economic growth over the same period in the eurozone – a monetary union of 19 of the 28 EU member states which have adopted the euro -- was 0.6 percent, according to an estimate by Eurostat.

The UK economy displayed surprising resilience in the immediate aftermath of last year’s referendum to exit the EU, but a recent jump in inflation has diminished consumer spending and pushed Britain’s growth rate to the lowest of the G7 group of major advanced economies.

Economists, strategists and think tanks have recently slashed their growth forecasts for the full year and many expect that the pound could fall even further.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said Thursday he expects the UK economy to grow by just 0.2 percent in the third and fourth quarters of 2017.

“Looking ahead, we expect the economy to continue to struggle,” he said. “The sharp fall in consumers’ confidence over the last two months suggest that households won’t continue to cut their saving rate.”

Tombs said he predicts the “Brexit risk to increasingly bear down on business investment as the UK’s exit date draws nearer.”

Separate data on Thursday showed that British household spending grew at its weakest pace since late 2014 in the three months to June of this year, bruised by the weak pound.

The International Monetary Fund (IMF) said last month that it expects Britain’s economy to grow by 1.7 percent overall in 2017, compared to a previous forecast of 2 percent.

UK job opportunities are diminishing as British employers' confidence to hire and invest has fallen to its lowest level since last year's EU referendum, according to new data from the Recruitment and Employment Confederation.